Correlation Between Alphaville and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Alphaville and Bread Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alphaville and Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphaville SA and Bread Financial Holdings, you can compare the effects of market volatilities on Alphaville and Bread Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alphaville with a short position of Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphaville and Bread Financial.
Diversification Opportunities for Alphaville and Bread Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alphaville and Bread is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alphaville SA and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings and Alphaville is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alphaville SA are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Alphaville i.e., Alphaville and Bread Financial go up and down completely randomly.
Pair Corralation between Alphaville and Bread Financial
Assuming the 90 days trading horizon Alphaville SA is expected to under-perform the Bread Financial. In addition to that, Alphaville is 2.19 times more volatile than Bread Financial Holdings. It trades about -0.01 of its total potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.64 per unit of volatility. If you would invest 8,160 in Bread Financial Holdings on September 14, 2024 and sell it today you would earn a total of 1,710 from holding Bread Financial Holdings or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphaville SA vs. Bread Financial Holdings
Performance |
| Timeline |
| Alphaville SA |
| Bread Financial Holdings |
Alphaville and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphaville and Bread Financial
The main advantage of trading using opposite Alphaville and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphaville position performs unexpectedly, Bread Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bread Financial will offset losses from the drop in Bread Financial's long position.| Alphaville vs. Metalrgica Riosulense SA | Alphaville vs. salesforce inc | Alphaville vs. TAL Education Group | Alphaville vs. Palantir Technologies |
| Bread Financial vs. Beyond Meat | Bread Financial vs. Zoom Video Communications | Bread Financial vs. Autohome | Bread Financial vs. STMicroelectronics NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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